In the realm of sophisticated software products, deciphering how customers truly adopt and utilize your offering can be a formidable challenge. As your customer base scales, the number of potential workflows, implementations, and use cases seems almost infinite.
While this diversity is a testament to the software's versatility, it poses a critical question: Are customers genuinely deriving value from the tool? To ensure continued customer satisfaction as their needs evolve, a profound understanding of how they extract value is essential. This article explores the concept of the "Customer Milestones Framework" employed by Intercom, shedding light on how it unraveled the customer journey, optimized experiences, and paved the way for long-term success.
The Customer Milestones Framework
At its core, the Customer Milestones Framework comprises four pivotal customer milestones:
Setup: The initial stage involves the setup process, encompassing crucial steps, from installing the software to configuring automation features.
Activation: This milestone signifies the early interactions customers have with the product, indicating that they are beginning to derive initial value. It typically involves customers reaching a specific threshold within the first three months of usage.
Utilization: This phase represents meaningful product engagement where customers experience the core value of the software.
Maturity: This advanced stage signifies that customers are harnessing the full spectrum of the product's capabilities to extract maximum value. It encompasses various categories, including support channels, automation, support operations, interoperability, and reporting.
Customers who successfully traverse these stages are more likely to remain loyal to the product and expand their usage over time.
Identifying the Milestones
Developing such a comprehensive framework required a multidisciplinary team, including data scientists, product researchers, and product leaders. The team worked backward from customer retention and deep product usage to define the milestones. They established thresholds of meaningful usage beyond which customers were more likely to retain and expand.
This involved identifying setup steps correlated with improved activation rates, pinpointing the activation threshold leading to enhanced utilization, and recognizing the hallmarks of utilization leading to mature and extensive product usage.
Maturity Milestone
Determining what constitutes mature usage involved both qualitative and quantitative approaches. Product Managers initially outlined what "mature" product usage meant to them. Conversations with customers and regular research provided insights into the features that sophisticated users favored.
The team validated these assumptions quantitatively using a random forest model. This model generated a list of product features ranked by importance scores based on their ability to predict retention. To balance this, they also validated the model's output against an adoption benchmark to ensure it was representative of the customer base. Ultimately, five categories spanning the product were defined, with two levels of usage: basic and mature.
Utilization Milestone
Defining the utilization milestone necessitated a metric that considered the customer's size relative to their product engagement. The team introduced a metric tied to what customers purchased to gauge their level of engagement effectively. By incorporating seat volume into the metric, they ensured scalability with the customer's size.
Activation Milestone
The activation milestone had been defined earlier but was revisited to ensure it aligned with the evolving framework. It was validated that activated customers were less likely to become dormant and more likely to continue using the product meaningfully.
Setup Milestone
To define the setup milestone, a combination of qualitative and quantitative methods was employed. Success criteria for setup were collated from R&D and Sales partners and verified through their correlation with activation rates.
Operationalizing the Framework
The overarching goal was to create a company-wide framework that would guide customers toward deeper product engagement. This involved creating a cross-functional team comprising R&D, Sales, Marketing, and Customer Support. Key initiatives included streamlining onboarding experiences, providing tailored support, adopting data-driven approaches to boost product usage, and developing content and campaigns to drive customers through milestones.
Lessons Learned and Key Takeaways
Through this extensive project, several lessons were gleaned:
Framework Review: Establishing a framework review process from the outset is essential to ensure its efficacy and longevity.
Data Operationalization: Rollout and data implementation can be more time-consuming and complex than anticipated. Collaboration with other teams and training colleagues on utilizing data effectively is crucial.
In conclusion, the Customer Milestones Framework has provided a powerful platform for deepening customer value, enhancing retention, and fostering a unified approach across the entire organization. As Intercom doubles down on this framework, it aims to deliver even greater value to customers and the business, ensuring that the customer journey remains a top priority.
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